The Home Mortgage Disclosure Act (HMDA) is a federal law that requires mortgage lenders to collect and report data on their lending practices. This data is used to monitor fair lending and identify potential discrimination in mortgage lending.
Key Facts
- Loan Types: HMDA reporting requirements apply to home purchase loans, home improvement loans, and refinancing loans.
- Loan Purpose: The loan must be for the purpose of purchasing a home, making improvements to a home, or refinancing an existing mortgage.
- Loan Categories: The loan must be either an open-end line of credit or a closed mortgage loan to qualify for HMDA reporting.
- Reporting Threshold: Financial institutions with a combined total of 60,000 applications and covered loans (excluding purchased loans) during the preceding calendar year are required to report HMDA data on a quarterly basis.
- Reporting Deadline: Financial institutions have sixty days following the end of each calendar quarter to submit their HMDA Loan Application Register (LAR), except for the fourth quarter, which has a submission deadline for the year-to-date file on March 1st.
Loan Types Subject to HMDA Reporting
HMDA reporting requirements apply to three main categories of loans:
- Home purchase loans: These are loans used to finance the purchase of a residential property.
- Home improvement loans: These are loans used to finance improvements to a residential property.
- Refinancing loans: These are loans used to replace an existing mortgage with a new one, typically with different terms and conditions.
Loan Purpose
The loan must be for the purpose of purchasing a home, making improvements to a home, or refinancing an existing mortgage. Loans for other purposes, such as business loans or personal loans, are not subject to HMDA reporting.
Loan Categories
The loan must be either an open-end line of credit or a closed mortgage loan to qualify for HMDA reporting. Open-end lines of credit are loans that allow the borrower to borrow money up to a certain limit, while closed-end mortgage loans are loans that have a fixed amount and a fixed term.
Reporting Threshold
Financial institutions with a combined total of 60,000 applications and covered loans (excluding purchased loans) during the preceding calendar year are required to report HMDA data on a quarterly basis.
Reporting Deadline
Financial institutions have sixty days following the end of each calendar quarter to submit their HMDA Loan Application Register (LAR), except for the fourth quarter, which has a submission deadline for the year-to-date file on March 1st.
Conclusion
HMDA reporting is an important tool for monitoring fair lending and identifying potential discrimination in mortgage lending. Financial institutions that are subject to HMDA reporting requirements should be familiar with the rules and regulations governing HMDA reporting.
References
- Consumer Financial Protection Bureau. (2023). Home Mortgage Disclosure Act FAQs. Retrieved from https://www.consumerfinance.gov/compliance/compliance-resources/mortgage-resources/hmda-reporting-requirements/home-mortgage-disclosure-act-faqs/.
- Wolters Kluwer. (2023). Understanding HMDA reporting: A comprehensive guide for lenders. Retrieved from https://www.wolterskluwer.com/en/expert-insights/understanding-hmda-reporting-a-comprehensive-guide-for-lenders.
- Consumer Financial Protection Bureau. (2023). HMDA Reporting Requirements. Retrieved from https://www.consumerfinance.gov/compliance/compliance-resources/mortgage-resources/hmda-reporting-requirements/.
FAQs
What types of loans are subject to HMDA reporting?
Answer: HMDA reporting requirements apply to home purchase loans, home improvement loans, and refinancing loans.
What is the purpose of a loan that is subject to HMDA reporting?
Answer: The loan must be for the purpose of purchasing a home, making improvements to a home, or refinancing an existing mortgage.
What types of loans are not subject to HMDA reporting?
Answer: Loans for other purposes, such as business loans or personal loans, are not subject to HMDA reporting.
What is the reporting threshold for HMDA data?
Answer: Financial institutions with a combined total of 60,000 applications and covered loans (excluding purchased loans) during the preceding calendar year are required to report HMDA data on a quarterly basis.
What is the reporting deadline for HMDA data?
Answer: Financial institutions have sixty days following the end of each calendar quarter to submit their HMDA Loan Application Register (LAR), except for the fourth quarter, which has a submission deadline for the year-to-date file on March 1st.
What data points are required to be collected and reported under HMDA?
Answer: HMDA data points include information such as the applicant’s name, race, ethnicity, gender, income, and loan amount.
How is HMDA data used?
Answer: HMDA data is used to monitor fair lending and identify potential discrimination in mortgage lending.
What are the penalties for non-compliance with HMDA reporting requirements?
Answer: Penalties for non-compliance with HMDA reporting requirements can include fines, civil money penalties, and reputational damage.